Entergy 2003 Annual Report Download - page 20

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In May 1989, Middle South Utilities became
Entergy Corporation, and a few years later,
the merger with Gulf States Utilities completed
the current Entergy service area. In 1998,
Entergy went “back to basics” in providing
reliable service to utility customers and
developing core competencies
at Entergy Nuclear and
Entergy-Koch. By this time
music had come full circle,
too, with the revival and
preservation of styles past
from ragtime to New
Orleans jazz to blues,
Cajun, Zydeco, bluegrass,
swing era jazz, cabaret
singing, and more.
At the same time, EKT has built more
predictable revenues from customer
businesses. EKT applies its expert knowledge
of energy markets to help the owners of
electric power plants and gas distribution
systems manage the commodity risks
associated with their assets. EKT has
positioned itself for further growth with a
high-quality credit rating and a fundamental,
quantitative analytical approach to managing
its trading business. Entergy-Koch has credit
ratings of A from Standard & Poor’s and A3
from Moody’s – the only A-rated energy
trading company without a parent guarantee.
EKT’s approach to trading is to create a
proprietary advantage based on more
accurate and rigorous analysis. EKT has
strong risk control and compliance
structures and processes, with two-thirds of
its resources dedicated to mid- and back-office
functions. EKT minimizes risk by trading in
short-term, liquid markets and by dealing
with high-quality counterparties.
A Growing Customer Business
EKT continues to focus on growing its stable
customer business to complement its point-of-
view trading. EKT adds value to customer-
owned assets – electric generation and gas
storage and transportation – to reduce their
Entergy-Koch, LP hasn’t missed a beat since it began
operations in 2001 – making money in all kinds of market
conditions. EKLP combines significant earnings upside from
disciplined trading operations with more predictable revenues
from its gas pipeline business to provide a consistent
contribution to Entergy earnings. In 2003, EKLP also paid
its first cash dividends – $100 million – to Entergy.
Entergy-Koch Trading balances point-of-
view energy trading with more stable
earnings from a growing physical
optimization business that manages customer-
owned power plants and gas distribution
systems. EKT has turned in a positive ratio of
gain days to loss days every year since it
began operations.
ENTERGY CORPORATION AND SUBSIDIARIES 2003